Colorado Affordable Housing Tax Credit (AHTC): A Powerful Tool for Local Affordable Housing
Colorado continues to face an urgent need for affordable housing. To address this, the state offers the Colorado Affordable Housing Tax Credit (AHTC).
AHTC is a state-level companion to the federal Low-Income Housing Tax Credit (LIHTC). It encourages the private sector to invest in affordable rental housing across Colorado.
Since its reintroduction in 2014, the AHTC has become a key resource for developers, nonprofits, and investors building housing for low- and moderate-income Coloradans.
What Is the AHTC Program?
The Colorado General Assembly originally created the AHTC program in 2001. The legislature renewed and expanded it in 2014, and again in 2022 through House Bill 22-1051.
AHTC provides Colorado state income tax credits to investors in affordable housing projects. It works alongside the federal LIHTC program, helping developers raise additional equity.
The program is managed by the Colorado Housing and Finance Authority (CHFA).
AHTC Program Requirements
To qualify, projects must meet these core requirements:
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Serve residents earning 60% of Area Median Income (AMI) or less
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Restrict rent levels for a minimum of 30 years
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Follow compliance rules of the federal LIHTC program
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Apply through CHFA’s annual LIHTC application process
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Receive AHTC credits based on need, impact, and readiness
AHTC awards are typically paired with 9% federal LIHTC, though some 4% projects also qualify. The state limits total credits issued each year.
How AHTC Credits Work
AHTC provides a state tax credit equal to 70% of the federal credit amount over six years.
For example, a project receiving $1 million in annual federal LIHTC can receive $700,000 per year in AHTC.
This structure provides an extra source of equity that developers can use to reduce debt or increase project scope.
Credits are transferable and sellable, meaning investors can purchase them to offset Colorado state income tax liability.
Recent Changes to AHTC
In 2022, Colorado extended the program through 2034. The new law also:
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Increased the annual AHTC ceiling from $10 million to $15 million
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Allowed greater flexibility for rural projects and nonprofit partnerships
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Supported expanded housing options like modular construction and adaptive reuse
These updates reflect the program’s success and broad bipartisan support.
Benefits of AHTC for Affordable Housing
AHTC helps close the funding gap in affordable housing finance. It also boosts project feasibility in high-cost or rural markets.
When paired with federal LIHTC, AHTC provides an incentive to build deeper affordability or include more supportive services.
It also increases investor interest in projects that might otherwise lack market appeal.
For cities and counties, AHTC can help achieve housing goals without requiring new local subsidies.
Comparison to Other Tax Credit Programs
| Program | Type | AMI Target | Credit Period | Administered By |
|---|---|---|---|---|
| LIHTC | Federal | ≤60% AMI | 10 years | CHFA |
| MIHTC | State | 80%–120% AMI | 5 years | CHFA |
| AHTC | State | ≤60% AMI | 6 years | CHFA |
AHTC and LIHTC support deeply affordable projects. MIHTC serves the “missing middle” workforce households.
How to Apply for AHTC
Developers must submit an AHTC request as part of CHFA’s LIHTC application process.
Key application steps include:
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Site control and zoning verification
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Preliminary architectural design and cost estimates
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Development team qualifications
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Pro forma financial model
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Letters of support and readiness to proceed
CHFA scores and ranks projects based on its Qualified Allocation Plan (QAP).
EVstudio Supports AHTC Projects Statewide
EVstudio has deep experience designing successful AHTC and LIHTC-funded affordable housing throughout Colorado.
Our team provides Architecture, Engineering, and Surveying under one contract. We work directly with developers to meet CHFA standards.
We understand the timelines, reporting, and design features that support compliance and long-term affordability.
Whether you’re pursuing new construction, modular housing, or adaptive reuse, EVstudio helps your AHTC project succeed.
Contact EVstudio today to learn how we can support your AHTC project from concept to completion. Let’s build Colorado’s housing future together.
